In a recent article titled Business Owners and Retirement Planning, on the Generational Equity website, an early statistic was revealed: over 40% of business owners do not have retirement plans in place.

In fact, based on anecdotal evidence, this is not that rare. Even the employees have done little more than the bare minimum to prepare for a long and happy retirement.

The basic facts are simple enough to appreciate. We are living longer (thanks to medical advances) and mutual retirement plans are becoming less stable (thanks to bankers’ greed).

There are likely to be a number of bankers who disagree with that last statement; But they probably aren’t among the many, many people who lost their entire retirement fund in the recent financial crisis.

It is time, perhaps, to think about planning for oneself.

In fact, the UK government recently enacted a scheme whereby people could choose to do just that, more or less.

Reading between the lines, it appears as if, by giving wage earners a choice over where to invest your mandatory contributions to a pension plan, the list of approved schemes is quite limited.

So what is the best approach?

Money Management Lessons from the Ancients

In “The Richest Man in Babylon” by George S. Clason, there is much wise advice on money management. are presented as Seven Cures for a Slim Bagand the five laws of goldas if chiseled into a collection of clay tablets.

The book is a great read, but one of the highlights is the approach given to how much to spend and how much to set aside for retirement. Or as the book says: “Other than whatever you make, it’s yours to keep. It shouldn’t be less than a tenth, no matter how little you make.”

The 10% rule is a recurring theme in the teachings of both Clason and Rohn, and is an amount that is meant to be saved, and never touched, until the saver no longer has the ability to earn.

At the same time, the book teaches that one should live on 70% of one’s income, which leaves 20% seemingly unaccounted for.

Enter Jim Rohn.

Jim Rohn on being financially independent

Jim Rohn once made a VHS video that was sent to various schools in the US, teaching teenagers how to manage their income, presented as rules for life.

Entitled “Three Keys to Greatness,” it covers a lot of ground, but money management focused on financial independence. That’s probably the best one can hope for at retirement age, and starting early, with small values, is the key to success.

One might disagree with Rohn’s insistence that the first 10% of profits go to charity, but he also adheres to the 70% spending rule, as mentioned above.

The other two tenths are distributed between active and passive investments.

It’s a revisited theme in “The Richest Man in Babylon,” where the reader is encouraged to invest 10% in companies that will make the most money, but only do so with experts in their field who have a solid reputation and a plan.

So modern retirement planning would seem pretty simple: save 10%, put 10% to work, live on 70%, and then decide what to do with the remaining 10%.

Almost unbelievably, it works. It just takes a little effort and some well-informed choices.